#EURGBP @ 0.86831 recovers a few pips from the daily low, though lacks follow-through. (Pivot Orderbook analysis)

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• EUR/GBP recovers a few pips from the daily low, though lacks follow-through.
• Looming recession risks weigh on the euro and act as a headwind for the cross.
• Aggressive ECB rate hike bets offer some support and help limit the downside.

The pair currently trades last at 0.86831.

The previous day high was 0.8781 while the previous day low was 0.8705. The daily 38.2% Fib levels comes at 0.8752, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8734, expected to provide resistance.

The EUR/GBP cross opens with a modest bearish gap on the first day of a new week, though finds support ahead of mid-0.8600s and recovers a few pips from a multi-day low. The cross, however, remains on the defensive through the early European session and is currently trading with modest intraday losses, below the 0.8700 mark.

The shared currency’s relative underperformance comes amid the protracted Russia-Ukraine war, which could lead to a deeper economic downturn in the Eurozone. The fears were further fueled by the rather unimpressive flash Eurozone PMI prints released this Monday. S&P Global reported that business activity in Germany’s manufacturing sector continued to contract at a faster pace in early October.

Adding to this, the flash Eurozone Manufacturing PMI slumped to 46.6 in October against estimates for a reading of 47.8, revealing a further contraction in the business activity. Moreover, the Services PMI edged lower to 48.2 from 48.8 as expected and the Composite PMI declined to 47.1 from 48.1. Apart from this, a strong pickup in the US dollar demand is further weighing on the common currency.

That said, rising bets for another jumbo 75 bps rate increase by the European Central Bank act as a tailwind for the euro. Hence, the focus remains glued to this week’s ECB monetary policy meeting. In the meantime, diminishing odds for a bigger 100 bps rate hike by the Bank of England (BoE) in November keeps a lid on any meaningful upside for sterling and helps limit losses for the EUR/GBP cross.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8685 at the time of writing. Pair opened at 0.8731 and is trading with a change of -0.53 % .

The pair is trading below its 20 Daily moving average @ 0.8767, above its 50 Daily moving average @ 0.867 , above its 100 Daily moving average @ 0.8589 and above its 200 Daily moving average @ 0.8494

The previous day high was 0.8781 while the previous day low was 0.8705. The daily 38.2% Fib levels comes at 0.8752, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8734, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8697, 0.8664, 0.8622
• Pivot resistance is noted at 0.8773, 0.8814, 0.8848

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